Frisco data shows short-term rental impact
Frisco town councilors reviewed a report compiled by Frisco Housing Program Manager Danelle Cook and town staff regarding Frisco’s housing situation. Council took no action but plans to make code changes soon and review other options at future work sessions.
The report analyzed the number of short-term rentals in town and their impact on Frisco’s housing market. The report compared past and present mortgage rates. It also compared Frisco and other nearby mountain towns. The rising price of homes in Frisco was also addressed.
Frisco started regulating short-term rentals May 1, 2019. Owners of units leased for terms of less than 30 days are required get a license for their unit. Cook said a desire to balance the demands of a tourist-driven economy with the needs of the local community guided Frisco’s decision.
The number of short-term rentals increased from 405 in 2019 to 724 in 2022. Cook said the growth is starting to level off, likely because more short-term rentals are coming into compliance, leaving fewer units to apply for licensure.
According to the report, 45% of Frisco’s residential housing units are vacant second homes, 25% are owner-occupied, 20% are short-term rentals and 10% are renter-occupied.
More than half are owned by Coloradans residing outside of Summit County. Of the remainder, 35% are owned by people living out-of-state, and 13% are owned by Summit County locals.
Compared to other communities, Frisco doesn’t have as many short-term rentals. Only 20% of units are short-term rentals. Comparatively, Breckenridge has 56%, Vail has 33% and Summit County as a whole has 28.58%.
Council member Andrew Aerenson wondered if towns differed because some “had a chairlift falling into it.” In ski towns like Breckenridge or Vail, he said short-term rentals could be viewed more like a commodity. “I see us as more like Granby than Winter Park,” he said.
Total town revenue from short-term rentals was $1.7 million in 2021 according the report. The projected revenue for 2022 is between $2.2 and $2.7 million, Cook said.
The price of homes have only dropped twice in the last 34 years, Cook said. The average price of a home has more than tripled since 2013, she said, from about $400,000 to $1.5 million.
In 2013, the county hit a “sweet spot,” Cook said, when affordable and actual mortgages almost equalized. But in 2021, affordable mortgages were $1,900, while actual mortgages hit $3,800.
“The majority of homes on the market right now are just not within reach for locals,” Cook said. “They are within reach for outside investors.”
The increase came from several factors, Cook said. Short-term rentals, in addition to second home owners and “Zoom-boomers,” likely contributed to increased prices collectively, Cook said.
Since implementing licensure for short-term rentals, Frisco also created a dedicated short-term rental complaint hotline for residents to notify the town of concerns. One goal of regulating short-term rentals in 2019 was to mitigate negative impacts on neighborhoods, like noise and too many parked cars.
The top five types of complaints since 2019 were noise with 76 complaints, parking (37), reports of possible unlicensed rental (36), excessive occupancy during COVID (14) and trash (13). In total, Cook said there were 192 complaints since 2019 — not much for three years of reporting according to Cook.
Complaints annually spiked in peak seasons. Mid-winter and mid-summer saw the highest complaints, with drops during the shoulder seasons.
Cook said, based on the report, the housing program team recommended five code revisions for the town to consider. The recommendations would require a signed affidavit from the emergency contact making them aware of their 24/7 responsibilities, contact information for the owner and applicant, a clear definition of short-term rental parking requirements, a definition of a bedroom and established fines and consequences for property owners or managers who fail to address complaints. Council members took no actions on the recommendations, but they plan to have first readings within the coming months.
Frisco Town Attorney Thad Renaud said Frisco Town Council had discussed in the past whether consequences and fines for violations would be government overreach. Other jurisdictions, he said, had also found sending out fines was easy, but collecting fines was hard. At some point, unpaid fines would either go to court or a collection agency, and he said the town would have to ask if it’s worth the hassle.
“There’s a yin and a yang,” he said.
Overall, councilors considered the report thorough, but it also raised more questions and conversation.
The council plans on continuing its discussion at future meetings. It voiced support for considering inclusionary zones, overlay zone districts and specifying types of rentals — unhosted versus owner-occupied, for instance. It was hesitant to support a cap on short-term rental licenses.
Cook said her team still had more questions to review, like obtaining stats on short-term rental conversions.
The full report can be downloaded from the town’s website by visiting the council and commission meetings page and downloading the packet attached to the council’s June 14 meeting.
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